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Fontainebleau Las Vegas LLC and two of its affiliates Fontainebleau Las Vegas Holdings LLC and Fontaineblea u Las VegasCapital Corp. filed bankruptcy petitions in Miamilate Tuesday. The Miam Beach hotel is not included inthe filing. The companhy said in a news release that the decision to file Chaptee 11 was the direct resulr of litigation with lenders on the Las Vegas hotelo construction project that had to do with contractua disputes related tonearly $800 milliob in construction funding for the $2.9 billion resort-casino project, which is 70 percenf complete. Lenders include , and Deutsche Bank Trusg Co. Americas.
The legal dispute has effectively shut down the projecttand “put thousands of people out of said Howard Karawan, chief restructuring officee of Fontainebleau Las in the release. “Our goal now is to secure fundingv to completethis world-class project and restructure our existinf debt.” Fontainebleau Las Vegas reached a provisional agreement with a group of its non-defaultinfg lenders for the use of cash for the administration of its bankruptcyg case, and is in negotiations to obtainh financing to restart construction on that project. Fontainebleau Miami which is a separate legal continues to operateas normal.
Turnberry West the project’s general contractor, is also not includedr in the filing, according to the news release. In Nakheel Hotels of Dubai boughy a 50 percent interest in the Fontainebleau Miami Beachfor $375 The Las Vegas hotel companies that filed bankruptcuy are based in South Florida because the Soffefr family of Aventura, which also owns the Turnberrty development and construction companies, owns all the Fontainebleauy companies. Jeffrey Soffer is a principal of umbrella compan FontainebleauResorts LLC, according to statre records.
Fontainebleau Las Vegas also withdrew without prejudicewits $3 billion lawsuit in Las Vegas againsr some of its lenders, and refiled the case in Miam bankruptcy court, where the Chapted 11 petitions were filed. The lawsuit with lendersd was amended on May 12 to include allegations that Deutschew BankTrust Co. Americad was “seeking to destroy the Fontainebleau in ordee tominimize competition” with the nearby and which is wholly owned by a Deutschre Bank subsidiary. "This claim is an attempt by the Fontainebleau'w developers to distract from the fact that they have breachedx theirloan covenants.
We will defend ourselvesd vigorously against this meritless Deutsche Bank spokesman John Gallagher said inan e-mailed Fontainebleau Las Vegas LLC listsx more than $1 billion in debt and a simila r amount in assets on its petition, with more than 1,009 creditors. The only Southj Florida creditor listed was International Bedding in Fort with a claimof $498,737.
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